Currency Market: Us Dollar Index Continues to Benefit From Trouble in the Eurozone

The euro is now breaking below 200 day moving average support, and looks to be in trouble.

The US Dollar Index has continued to trend higher after offsetting the bearish head-and-shoulders pattern and 200-day moving average late last month. This trend has been exacerbated by the continued weakness in the euro and the Japanese yen, and while near term we might see some consolidation at these levels, I would continue to use pullbacks in the US Dollar Index to add long exposure. Any move back below 82 on the DX should be a buying opportunity. See the chart below.

Click to enlarge

This strength in the US Dollar has been pretty much the only thing going on in currencies over the last month, which is why I have been relatively quiet. The only thing I would point out is that the Australian and New Zealand dollars have been quietly improving against the US dollar, so I would keep an eye on those two commodity currencies to see if there are new uptrends emerging. It will be interesting to see how the markets start moving in April when we have a fresh quarter, and I will post an update when we start to see some interesting setups. Thanks for reading and best of luck trading!

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